February 3, 2026
This article is part three of five of an interview conducted by Amber Busch with Dave Eskenazy.
Past, Present, and Future Trends in the Senior Living Industry
Executive Summary
Next, Dave discussed key industry trends, focusing on the lasting impact of the COVID-19 pandemic on senior living. Dave explains how the sector shifted from hospitality-driven environments to a stronger emphasis on healthcare and purposeful design. The pandemic exposed weaknesses in traditional business models, particularly those tied to investment-driven ownership, and underscored the need for resilience and adaptability.
Today, the outlook reflects cautious optimism. New construction is picking up, but challenges remain, including high construction costs, tight lending conditions, and the necessity for robust financial reserves. Affordability is an increasing concern as rising expenses outpace home values, while technological advances allow seniors to stay at home longer. Dave notes that overcoming these hurdles will require innovation, policy reform, and a renewed commitment to delivering value.
Despite these obstacles, the industry’s core mission endures: creating safe, engaging, and supportive communities for seniors. Dave urges leaders to learn from past cycles, invest in purposeful design, and stay agile to meet the evolving needs of an aging population.
How COVID-19 Reshaped Senior Living: From Hospitality to Healthcare
Amber Busch:
We’ve talked a lot about how the pandemic reshaped the senior housing industry. Are there other ways you think it changed the industry or your work at Cogir?
Dave Eskenazy:
Absolutely. When I was with Aegis Living, we focused on creating environments that didn’t look or feel like nursing homes. We avoided using the word “nurses” and didn’t want staff to dress like nurses; we wanted a hospitality-driven atmosphere. Our goal was always quality of living.
The pandemic shifted that perspective. Now, it’s not only acceptable but also important to highlight that we provide both hospitality and healthcare. We don’t need to hide the nurse’s station anymore; we can present it as an amenity. Many people want reassurance that healthcare needs are covered, and it’s okay, maybe even necessary, to emphasize that.
The pandemic also exposed vulnerabilities in business models, much like a storm reveals leaks in a house. In senior housing, many buildings are owned by investment funds with five- or seven-year cycles. When a downturn hits, those funds can get stuck in those investments, especially if they need to refinance in a very different economic environment. With five- or seven-year mortgages, they may need to refinance. Rising interest rates, lower property values, and tighter lending can all create unexpected challenges. I hope we have a wiser set of investors now, but I’m seeing new entrants who may not fully understand the complexities, just like before the last cycle.
Amber Busch:
During COVID, I remember people wanting to convert apartment buildings into senior housing, but they didn’t consider things like hallway and doorway widths for wheelchairs or walkers. People new to the industry often miss those basics.
Dave Eskenazy:
Exactly. There are many details that aren’t obvious, like commercial kitchens or how units are stacked in a building. Conversions are always challenging in this industry. Purposeful design has proven to be the best approach.
Right now, new construction has slowed, which is a mixed blessing. For those of us working to rebuild occupancy after the pandemic, it’s actually helpful not to have a lot of new communities opening up and increasing competition. It doesn’t do much for affordability, but it gives the industry a chance to recover. Even if development picks up soon, it will be years before new buildings open, so for now, we’re in a relatively stable position.
Senior Housing Development in 2026: Why New Construction Is Still Slow
Amber Busch:
Are you seeing development start up again, or are people still hesitant because of interest rates and costs?
Dave Eskenazy:
Two years ago, if you asked an investor group about new development, most would have said no. They might have considered acquisitions, but not new projects. Now, you’re hearing more, and a lot of maybes, so there’s definitely more openness than before.
So yes, new development is starting to pick up, but that doesn’t mean it’s easy. The business model is still challenging: costs are high, interest rates are high, lending is tight, and guarantees are still required.
One lesson from the pandemic is the importance of having strong reserves and working capital. If your lease-up gets delayed or interrupted, negative cash flow can stretch from a few months to a couple of years. You also need access to capital throughout the lease-up and construction phases, because there are always surprises, whether it’s tariffs, buyouts, or unexpected construction costs.
The Senior Living Affordability Crisis: What Baby Boomers Are Facing
Amber Busch:
We see this tidal wave of retirees coming with the baby boomers. Because of COVID, higher interest rates, and rising construction costs, the development of new senior living facilities has slowed. What do you think that means for affordability for seniors? I’ve seen occupancy go up for my clients, which is helping them recover from 2020, but with so many aging seniors and not enough properties, what’s going to happen in the industry?
Dave Eskenazy:
It’s going to be really challenging. We’re seeing residents with higher care needs than before, and people are waiting longer to move into assisted living; they are staying in their homes as long as possible. We saw something similar during the 2008–2009 recession: independent living took a bigger hit than memory care or high-acuity assisted living, because those were needs, not wants. Home values dropped, so people didn’t want to sell at the bottom of the market; they stayed put rather than move into independent living.
We hoped that once things improved, more people would be drawn to senior living communities for the social benefits and amenities. The pandemic taught us that loneliness can be as dangerous as the virus itself. But even now, we’re not seeing a big shift toward independent living for social reasons.
Affordability is the real issue. Labor, interest rates, property taxes, and construction costs are all high. In many markets, it costs over $500,000 per unit to build a new community, so we have no choice but to charge a lot. Congregate living is only getting more expensive. For example, if your house is worth $1 million and it costs $100,000 a year for senior living, that’s ten years’ worth of housing. So far, home values have kept pace with annual costs, but that may not last. Home prices are stabilizing, while the cost of senior living keeps rising.
At the same time, technology like Amazon, AI, and smartphones makes it easier for people to stay at home and get what they need delivered. Everything is at your fingertips now, so living at home is more practical for many.
When it comes to affordability, I think more people will stay home longer, simply because congregate living is becoming less affordable. I hope we see some tax relief, maybe allowing people to use retirement funds for elder care without penalties to keep seniors off government programs. The government will have to address this, but I don’t have a simple answer. It’s going to be a tough problem that will require a combination of solutions.
-End of Part 3 of interview-
Click here to read more about Amber’s interview with Dave Eskenazy.
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